Treasury Secretary Testifies Before Congress

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Treasury Secretary Steven Mnuchin testified about budget issues before two Congressional committees this week.  On Monday he appeared before a House Appropriations Subcommittee and on Tuesday he addressed the Senate Budget Committee.  In both appearances, tax reform was among his topics.

 

Mnuchin characterized tax reform as one of the pillars of sustainable economic growth, along with regulatory relief and trade.  "It has been over 30 years - too long - since we have had comprehensive tax reform in this country" he stated Monday.  The administration's plan, to be revealed in the next few weeks, eliminates all itemized deductions other than charitable contributions and mortgage interest.

 

On the business side, Mnuchin said "We believe in a business tax, not just a corporate tax."  To this end, a single business tax rate will apply to income earned through passthrough entities such as partnership, LLCs, and S corps as well as to C corporations.  The rules will include provisions to keep individuals from abusing the passthrough rate for non-business income.

 

Budget Committee Chairman Mike Enzi (R-WY) said that he is confident the administration "is committed to working with Congress to allow us to get a bill across the finish line."  Committee Democrats, however, criticized the administration's tax reform proposals as well as the overall budget as favoring the wealthiest Americans at the expense of the middle class.

 

Separately, on Tuesday the House passed the Verify First Bill along a party-line vote.  The bill requires social security numbers to be verified before taxpayers are eligible for the health insurance premium tax credit passed by the House last month as part of the American Health Care Act (AHCA).  AHCA, which is currently being considered by the Senate, repeals most Affordable Care Act taxes.

 

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